Should earners also get Super?

Retirement used to be synonymous with receiving National Superannuation. Not any more. New Zealanders can still collect National Super at age 65 but, as we report today, nearly 40 per cent of those reaching that age now continue working. We have one of the highest rates of employment in the OECD for people aged 65-69, exceeded only by Iceland, South Korea and Japan. Why is this?

One reason is the health of people of pension age today. We report that NZ Health Surveys have found 88.5 per cent of New Zealanders aged 65-74 rate their health as “good” or better, which is virtually the same as the proportion of all adults.

In other words, we feel as well in our late 60s and early 70s as we ever have. And if we are enjoying working we carry on, pocketing a pension of $385 a week (or $592 on the married rate) in addition to our earnings.

It is the generosity of that arrangement that probably accounts for our high placing in the OECD. In places such as Australia, senior citizens are just as healthy as here, can look forward to living just as long as we do and probably enjoyed their career just as much as we did.

But maybe when they reach the qualifying age they have to choose whether to continue working for a living or taking the pension. Maybe we should, too.

Many who continue working past 65 say they “cannot afford to retire”, which probably means they do not have sufficient savings to provide an annuity that, when added to the pension, would give them an income as good as they have been earning. But those who have a career they want to continue probably have been earning well enough to have property or other investments they could cash in.

When 65-year-olds were surveyed by the Social Development Ministry in 2009, the main reason given by those continuing to work was they “liked being busy”. The next most common reason they gave was they “liked their work”. The next was that they “felt they had something to contribute”, followed by “contact with other people”. Needing the income, came a distant fifth.

It is good that fit and healthy senior citizens want to continue keeping busy, being useful and contributing to society. Perhaps we can afford to pay pensions to so many who do not need one. But it bears thinking about.